Presentation to Independent Verifiers 18 November 2017

What is an independent verifier? Schedule E.4. Independent Verifiers The Diocesan Finance Board may authorise members of the Anglican church who are experienced in financial matters to act as independent verifiers for any parish, chapelry or other component of the Diocese in place of an auditor. Before making such appointments, the Diocesan Finance Board shall recommend the scope of the verification, the form of the report and the training for any one who wishes to be recognised as an independent verifier. A certificate under the hand of the Bursar or Deputy-Bursar shall be required to authorise an independent verifier to act as such in terms of these rules.

How is a verifier appointed? The Diocesan Rule H-1.2(8) requires that the business of vestry include the appointment of an auditor or independent verifier. The amendment to the rules at this year’s Synod provides that the verifier’s name must be submitted to the Diocesan Finance Board for authorisation prior to appointment. The verifier’s appointment must be confirmed in writing by the Bursar.

What are a verifier’s responsibilities? At least seven days before the day appointed for the Annual Vestry Meeting, the Churchwardens shall cause copies of the audited or verified statement of revenue and expenditure and balance sheet signed by the Incumbent and themselves, and reported on by the auditor or independent verifier, to be affixed to the door or notice board of the church or place of worship, or otherwise effectively brought to the notice of the parishioners. The verifier is required to undertake the work in accordance with the procedures set out in the Independent Verifiers’ Manual using the standard template for the presentation of the financial statements

What does the Independent Verifiers Manual cover? Our goal  Diocesan expectations of Independent Verifiers Our objectives Training of Independent Verifiers Differences in Parish needs Process support from the Diocese Responsibilities of Churchwardens, Rectors and Council Diocesan Accounting Practices Churchwardens’ and Rector’s Stewardship Report Support from Parish Finance Portfolio Diocesan expectations of Auditors Independent Verifiers Report

Standard documents Churchwardens’ and Rector’s Stewardship Report Checklist for Churchwardens and Council Independent Verifier’s Standard Report Independent Verifier’s Qualified Report Checklist for Independent Verifiers Support from Finance Portfolios Diocesan Accounting Practices Training Workshop Content for Independent Verifiers

Standard documents Churchwardens’ and Rector’s Stewardship Report Checklist for Churchwardens and Council Independent Verifier’s Standard Report Independent Verifier’s Qualified Report Checklist for Independent Verifiers Support from Finance Portfolios Diocesan Accounting Practices Training Workshop Content for Independent Verifiers

Churchwardens’ and Rector’s Stewardship Report The Churchwardens’ and the Rector are entrusted with a number of matters related to their stewardship of the parish. The introductory paragraph reads: We accept responsibility for the stewardship of the Parish and confirm that the administration and finances of the Parish have been properly managed during the past year in accordance with the Canons of the Anglican Church of Southern Africa and the Rules of our Diocese. It then goes on to specifically address income and expenditure management, management of assets, registers and other records, state of buildings and insurance thereof and human resource matters. It ends with confirmation that the financial statements correctly disclose all financial information. THE INDEPENDENT VERIFIER MUST BE SATISFIED THAT WHAT THEY STATE IS IN ACCORDANCE WITH WHAT THE VERIFICATION DISCLOSES AND MUST QUALIFY THE REPORT IN RESPECT OF ANY MATERIAL DEVIATIONS.

Standard documents Checklist for Churchwardens and Council Churchwardens’ and Rector’s Stewardship Report Checklist for Churchwardens and Council Independent Verifier’s Standard Report Independent Verifier’s Qualified Report Checklist for Independent Verifiers Support from Finance Portfolios Diocesan Accounting Practices Training Workshop Content for Independent Verifiers

Checklist for Churchwardens and Council This checklist is provided as an aid to Wardens and Rectors in preparing the Stewardship report. The Verifier should discuss the checklist with the Wardens and identify any matters not complied with. In the event that matters of non-compliance are identified, the Wardens should be requested to rectify the matters and, in the event of non-rectification, details should be incorporated in their report to Vestry. In cases of uncertainty, the matter should be referred to the DEO for guidance as to how to proceed

Standard documents Independent Verifier’s Standard Report Churchwardens’ and Rector’s Stewardship Report Checklist for Churchwardens and Council Independent Verifier’s Standard Report Independent Verifier’s Qualified Report Checklist for Independent Verifiers Support from Finance Portfolios Diocesan Accounting Practices Training Workshop Content for Independent Verifiers

Independent Verifier’s Standard Report Report of the Independent Verifier to the Members of the Parish of __________ I have reviewed the attached annual financial statements for the year ended 31 December 2017, which were prepared on behalf of the Council by the Treasurer/Finance Portfolio. From my review I can confirm that these statements are in agreement with the accounting records of the parish and that in my opinion adequate records have been maintained. It is not possible to verify income before it is recorded in the records as cash received. I note the following matters which are referred to in the Stewardship Report by the Rector and Churchwardens will be brought/have been brought to the attention of the Parish Council and will be tabled at Vestry: ……………………………………………………………………………………………………….. I further report that the following matters have not been included in the Stewardship Report and have not been resolved to my satisfaction: Subject to the above comments, in my opinion, the attached Balance Sheet at 31 December 2017 fairly presents the financial position of the Parish at that date, and the Income & Expenditure account fairly presents the results of its activities for the year ended on that date. Signed Independent Verifier Date

Independent Verifier’s Standard Report Where the financial statements are prepared by the verifier from the financial records of the parish, an variation of the report is provided for what we have termed a Category B parish which may be summarised as one which maintains books and records but does not have the expertise to prepare the annual financial statements. Where the financial statements are prepared from scratch by the verifier, a Category C report is provided

Standard documents Independent Verifier’s Qualified Report Churchwardens’ and Rector’s Stewardship Report Checklist for Churchwardens and Council Independent Verifier’s Standard Report Independent Verifier’s Qualified Report Checklist for Independent Verifiers Support from Finance Portfolios Diocesan Accounting Practices Training Workshop Content for Independent Verifiers

Independent Verifier’s Qualified Report Where the state of the parish records is such that there are issues which preclude the verifier from confirming that the accounts are correct, a standard report is provided to assist the verifier. This can be as a result of non-availability of records, non-recording of assets or liabilities etc. The Diocesan Executive Officer should be advised at an early stage of any such problems so that assistance may be provided if necessary.

Standard documents Checklist for Independent Verifiers Churchwardens’ and Rector’s Stewardship Report Checklist for Churchwardens and Council Independent Verifier’s Standard Report Independent Verifier’s Qualified Report Checklist for Independent Verifiers Support from Finance Portfolios Diocesan Accounting Practices Training Workshop Content for Independent Verifiers

Checklist for Independent Verifiers The checklist should be: completed in respect of all verifications; signed by the verifier; submitted to the Diocesan Office together with the annual statements. All exceptions should be explained in the Notes column. They should all be discussed with the Wardens and all matters not rectified should be referred to in the Stewardship Report or failing such reporting, in the Verifiers Report

Standard documents Support from Finance Portfolios Churchwardens’ and Rector’s Stewardship Report Checklist for Churchwardens and Council Independent Verifier’s Standard Report Independent Verifier’s Qualified Report Checklist for Independent Verifiers Support from Finance Portfolios Diocesan Accounting Practices Training Workshop Content for Independent Verifiers

Support from Finance Portfolios Basic standards laid down by the Diocese include: The recognition of all monies received and expended in the accounting period from all sources. The accounting in the statements of all monies wherever these are held. The assurance that the statements represent fully the intentions of the parish council, committee or other body responsible for their compilation. The commitment of the Diocese to timeous and transparent reporting on financial matters. Our Rules require that Vestries are held before the 15th March. The safeguarding of the financial and other assets of the parish or organisation. Schedule F provides details of the information that should be provided to the verifier by the treasurer, assisted where necessary by the Archdeaconry Finance Representative

Standard documents Diocesan Accounting Practices Churchwardens’ and Rector’s Stewardship Report Checklist for Churchwardens and Council Independent Verifier’s Standard Report Independent Verifier’s Qualified Report Checklist for Independent Verifiers Support from Finance Portfolios Diocesan Accounting Practices Training Workshop Content for Independent Verifiers

Diocesan Accounting Practices The key principle is that the Annual Financial Statements are understood by parishioners. Simple, understandable terms should be used. The more sophisticated the congregation the more sophisticated the wording can be. However even in these congregations, a knowledge of accounting and its terminology are not always high. Schedule G sets out guidance as to the preferred practices taking account of the above. A specific issue is the provision for the payment where a parish has commercial income exceeding 5% of its income. Full details of how tax is calculated is available on the Diocesan Website under the tab Diocesan Office/Information for parishes/Taxation. All other documents referred to in this presentation are also available from the same reference.

Standard documents Training Workshop Content for Independent Verifiers Churchwardens’ and Rector’s Stewardship Report Checklist for Churchwardens and Council Independent Verifier’s Standard Report Independent Verifier’s Qualified Report Checklist for Independent Verifiers Support from Finance Portfolios Diocesan Accounting Practices Training Workshop Content for Independent Verifiers

Training Workshop Content for Independent Verifiers A summary of the expectations of the verifier are set out at Schedule G. The appointment of Archdeaconry Finance Representatives as approved at the last Synod will in due course relieve the verifiers of some of these expectations

closure The Independent Verifier provides an inestimable service to the parishes, the parishioners and the Diocese and is a manifestation of the gifts of the spirit as set out in 1 Corinthians 12:8-10 As it is written in 1 Peter 4:11  If anyone speaks, they should do so as one who speaks the very words of God. If anyone serves, they should do so with the strength God provides, so that in all things God may be praised through Jesus Christ. To him be the glory and the power for ever and ever. Amen. THANK YOU